THE MINIMUM WAGES ACT,

1948
Cover story
 Large numbers of women and young workers, paying
them what were considered to be substandard wages

 unfair bargaining power

 minimum wage laws cover workers in most low-paid
fields of employment
Minimum Wages Act, 1948
 Minimum Wages Act, 1948 provides for fixation and
enforcement of minimum wages in respect of scheduled
employments.

 To prevent sweating or exploitation of labour through payment

of low wages by ensuring a minimum subsistence wage for
workers.
 The Act also requires the appropriate government (both at
Centre and States) to fix minimum rates of wages in respect of
employments specified in the schedule and also review and
revise the same at intervals not exceeding five years.
With effect from November 2009, the National Floor Level of
Minimum Wage has been increased to Rs 100 per day from Rs
80 per day (which was in effect since 2007).
APPLICABILITY OF THE ACT
 Applicable to Whole India

 Central Government Act of 1948 and Rules made there

under will be applicable and the directions given in the
Act should be followed.

 As per the Central Government Act, the State

Governments have been empowered to add schedules or
to give directions.
DEFINITIONS

 CHILD - Age less than 14

 ADOLESCENT - Age more than 14

less than 18

 ADULT - Age more than 18

EMPLOYEE

 (1) Employed for Hire or Reward

 (2) To do skilled or unskilled work
 (3) Manual or Clerical
 (4) Job Worker
 (5) Any person declared by the appropriate
 Government as Employee but, does not include

any member of armed forces

 EMPLOYER
 – Who employs persons directly or indirectly through other person.

 DEEMED EMPLOYER IN THE CASE OF GOVERNMENT

AUTHORITY

 – The person appointed by the Government to Supervise and Control

the Employees.
 In case no person was appointed then the Head of the Department will
be the Deemed Employer
 DEEMED EMPLOYER IN THE CASE OF LOCAL AUTHORITY
 – The person appointed by the Local Authority to Supervise and
Control the Employees. In case no person was appointed then the Chief
Executive
 Officer of the Local Authority will be the Deemed Employer

DEEMED EMPLOYER IN OTHER CASES

 – Any person responsible to the owner for the supervision and control
of the Employees or for the Payment of Wages
 SCHEDULED EMPLOYMENT
– Any employment specified in Part – I and
Part – II of the Schedule provided in Minimum Wages Act.

– Part – I specifies certain types of Industries

– Part – II deals with persons working in

 Agriculture, Horticulture and Live Stock or Poultry.
 PART – I
 Employment in any woollen carpet making or shawl weaving
establishment.
 Employment in any rice mill, flour mill or dhal mill.
 Employment in any tobacco (including bidi making)
manufactory.
 Employment in any plantation, that is to say, any estate which is
maintained for the purpose of growing cinchona, rubber, tea or
coffee.
 Employment in any oil mill.
 Employment under any local authority.
 Employment on the construction or maintenance of roads or in
building operations.
 Employment in stone breaking or stone crushing.
 Employment in any lac manufactory.
 Employment in any mica works.
 PART – I
 Employment in public motor transport.
 Employment in tanneries and leather manufactory.
 Employment in gypsum mines
 Employment in barytes mines
 Employment in bauxite mines.
 Employment in Manganese mines.
 Employment in the maintenance of buildings and
employment in the construction and maintenance of
railways.
 Employment in China clay mines
 Employment in kyanite mines
 Employment in Copper mines
 PART – I
 Employment in Clay Mines covered under the Mines Act,
1952.
 Employment in Mangnesite Mines covered under the
Mines Act, 1952.
 Employment in white clay mines
 Employment in stone mines
 Employment in Steatite Mines (including the mines
producing Soapstone and Talc).
 Employment in Ochre Mines.
 Employment in Asbestos Mines.
 Employment in Fire clay Mines.
 Employment in Chromite Mines.
 PART – I

 Employment in Quartzite Mines.

 Employment in Quartz Mines.

 Employment in Silica Mines.

 Employment in Graphite Mines.

 PART – II
 Employment in agriculture, that is to say, in any form of
farming, including the cultivation and tillage of the soil,
dairy farming, the production, cultivation, growing and
harvesting of any agricultural or horticultural
commodity, the raising of live-stock, bees, or poultry, and
any practice performed by a farmer or on a farm as
incidental to or in conjunction with farm operations
(including any forestry or timbering operations and the
preparation for market and delivery to storage or to
market or to carriage for transportation to market of
farm produce).
DEFINITIONS
 WAGES
 – Expressed or Implied Monetary Payment in terms of Contract of
Employment and includes House Rent Allowance.

 WAGES DO NOT INCLUDE

 – House Accomodation, Supply of necessities like Light, Water and
Provision of Medical Attendence and Other Amenity or Service
specifically excluded by the Appropriate Government.

 – Contribution made to Pension Fund or Provident Fund or under

any scheme of Social Insurance

 – Travelling Allowance or the value of any Travelling Concession

 – Special Allowances provided based on the nature of Employment

 – Gratuity Payable
 APPROPRIATE GOVERNMENT
 – The Central Government will be the appropriate Government in
the case of scheduled employment provided by Central
Government, Railway Administration, Oil-fields, Major Ports or
any Corporation established by Central Government.

 – The State Government will be the appropriate Government in

relation to any other scheduled employment other than mentioned
above.

 COMPETENT AUTHORITY
– The Authority appointed by the appropriate Government by
notification in its Official Gazette to ascertain from time to time the
cost of living index number applicable to the employees employed in
the scheduled employments.
 FIXING OF MINIMUM RATE OF WAGES BY
APPROPRIATE GOVERNMENT
 MINIMUM TIME RATE
– The Minimum Wages paid for Time Work.

 MINIMUM PIECE RATE

– The Minimum Wages paid for Piece Work.

 GUARANTEED TIME RATE

– Those employed under the scheme of Piece Work but,
Guaranteed Wages will be paid on the basis of Time.

 OVERTIME RATE
– Time Rate of Piece Rate will apply where the Employee has
worked overtime over and above his normal working hours.
 FIXING OF MINIMUM RATE OF WAGES BY
APPROPRIATE GOVERNMENT
 MINIMUM RATE OF WAGES WILL BE FIXED FOR
 – Employments provided in Schedule – I & II
 – Different Types of Employments provided in Schedule – I&II
 – Adults, Adolescents, Children and Apprentices.
 – Different Localities

 WAGE PERIODS FIXED UNDER MINIMUM RATE OF

WAGES
– By the Hour
– By the Day
– By the Month
– By such other larger wage period as may be prescribed
 FIXING OF MINIMUM RATE OF WAGES BY APPROPRIATE
GOVERNMENT

 FIXING OF MINIMUM WAGES

– The Minimum Wages has to be paid irrespective of the extent of Profit or
Financial Condition of the Establishment.

 – The Minimum Wages has to be paid irrespective of availability of

workmen willing to work on lower wages

 – The Committees appointed will recommend the Minimum Wages to be

paid which is recommendatory. The final decision has to be made by the
appropriate Government.

 – In case the Employers have not adhered to Minimum Wages then, the
Employee can move to Labour Courts before proceeding to High Courts
– Minimum Wages has been fixed for the bare subsistence of life and also to
preserve the efficiency of the worker which will provide education, medical
requirements and amenities of himself and his family.

 – The appropriate Government is empowered to fix the Minimum Wages

irrespective of the strength (even below one thousand employees)
 – The Minimum Wages will be fixed based on the Nature of Work and
Quantum of Work.
 COMPONENTS OF MINIMUM WAGES

 Method 1 – Basic Rate of Wages + Special Allowance called as Cost

of Living Allowance

 Method 2 – Basic Rate of Wages without any Cost of Living

Allowance

 Method 3 – Consolidated Pay without splitting into Basis Rate of

Wages, Cost of Living Allowance or Cash Value of Concession.

 Value of Supply of Essential Commodities

 The Value will be computed by the Competent Authority

Periodically as per the directions given by the Appropriate
Government.
 PROCEDURE FOR FIXING AND REVISING
MINIMUM WAGES

 Committees and Sub-Committees appointed by the

Appropriate Authority will hold enquiries, collect
information and will submit the proposal for Revision of
Minimum Wages to the Appropriate Authority.

 The Appropriate Authority after perusing the proposal

will publish its decision by notification in the official
gazette and the specific date from which the revised wages
has to be paid. The specific date should not be less than
two months from the date of notification.
 COMMITTEES OR BOARD

 ADVISORY BOARD An Advisory Board will be appointed by the

Appropriate Government for co-ordinating the work of Committees
and Sub-Committees and also the Advisory Board will provide its
valuable suggestions and recommendations to the Appropriate
Government.

 CENTRAL ADVISORY BOARD : The Central Advisory Board

Consisting of the persons nominated by the Central Government
representing employers and employees in the scheduled
employments who shall be equal in number. The Central
Government will nominate independent persons not less than 1/3 rd
of the total number of members. The independent person will be
The Chairman of the Board.

 COMMITTEES : The Committees or Sub-Committees shall consist

of the persons nominated by the Central Government representing
employers and employees in the scheduled employments who shall
be equal in number. The Central Government will nominate
independent persons not less than 1/3 rd of the total number of
members. The independent person will be The Chairman of the
Committee.
 PAYMENT OF WAGES
 Minimum Wages payable under this Act, shall be paid in
Cash.
 Where it is customary that, Minimum Wages has to be
paid partly in cash and partly in kind or wholly in kind, in
those circumstances the Appropriate Government by
issuing a notification in the official gazette will authorize
for Payment of Wages in kind.
 The Appropriate Government will decide the value for the
concessional, essential commodities provided to the
employees by issuing a notification in the official gazette.
 The Minimum Wages has to be paid without any
deductions other than Statutory Deductions.
 NORMAL WORKING HOURS

 For an Adult Worker, Working in Factories the number of

Working Hours should not exceed 48 Hours in a week.
 One Day should be given as a holiday as Weekly Holiday.
The Day can be any day but it should be adhered for
every week. The same should be displayed in the notice
board of the Factory.
 The Daily Hours should not exceed more than 9 Hours
with 1 Hour Rest Interval.
 Where a person has worked on a Holiday either a
Compensatory Holiday may be provided or An Overtime
Wages will be paid.
 EXCEPTIONS TO NORMAL WORKING HOURS
 The Normal Working Hours need not be adhered in the
following cases:
 (1) Where the persons were employed to meet emergency
or urgent work.

(2) Whose Employment is dependent on Natural

Factors like seasonal factors

(3) Employees those who have not completed their duty in

time for technical reasons.

(4) Where the Nature of Duties has to be necessarily carried

out beyond Normal Working Hours.
 OVERTIME WAGES

 Where a person has worked more than the Normal

Working Hours for any day, the excess hours worked will
be treated as Overtime

 Where the Fixed Normal Working Hours for any day is in

excess of 8 Hours we have to go by the method of weekly
worked hours. If the person has worked for more than 48
hours in a week then, the excess hours worked will be
treated as Overtime.
 WAGES FOR A PERSON WHO HAS WORKED
LESS THAN NORMAL WORKING HOURS

 Where an Employee worked on any day less than the Normal

Working Hours due to the fact that, Employer could not provide
the activities of the job then, the Employee is entitled to receive
full salary.

 Where an Employee worked on any day less than the

Normal Working Hours due to the fact that, Employee has
not worked due to his unwillingness then, the employee is not
entitled to receive full salary.
 WAGES FOR TWO OR MORE CLASSES OF
WORK

 Where an Employee does two types of works which has

different Minimum Wages then, the Employer shall pay to
such Employee based on working hours allocated to each
type of job. Where working hours cannot be allocated on
a minute basis a reasonable method can be adopted.
 MINIMUM TIME RATE WAGES FOR PIECE
WORK

 Where the Payment is Fixed on a piece-rate basis by the

Employer and which does not find place in the Act for
piece rate then, the Employer should pay him Wages at
not less than the Minimum Time Rate.
 RECORDS TO BE MAINTAINED

 Employer should maintain a Register of Employees containing

the details such as the name, address, father’s name, age, sex,
the work performed, the wages paid to them.
 Every Employer should display the above particulars in the
premises where the Employee works.
 The other Registers to be maintained are:
 (1) Register of Fines.
 (2) Register of Deductions for Damage / Loss caused to the
employer, by the neglect / default of the employed persons.
 (3) Overtime Register for Workers
 (4) Muster-Roll
 The Registers shall be preserved for a period of 3 years after the
date of last entry made therein.
 INSPECTION
 The Appropriate Government through notification in the official
gazette appoint inspectors and also define the local limits for
such inspectors.
 The inspectors have right to enter the premises of employers at
all reasonable hours and have right to verify all the records as
required to be maintained by law.
 The inspectors have right to examine any person they find in the
premises.
 Inspectors have right to enquire about the work given to
workers and have right to get information from the employers
about the payment of wages, etc.,
 The Inspectors have right to cease or take copies of registers
maintained by the Employer in case, the Inspectors feel that the
Employee has committed any mistake.
 The Inspector shall be deemed to be a Public Servant.
 CLAIMS
 The Appropriate Government by notification in the
official gazette appoint any commissioner for workmen
compensation or labour commissioner for any region or
any officer of the State Government not below the rank of
Labour Commissioner or Judicial Magistrate to be
Authority to hear and decide for any specified area all
claims arising out of payment of less than the Minimum
rate of Wages to Employees employed in that area.
 PROCEDURE FOR CLAIMS

 An Employee who has claim over the Employer through his legal
practitioner or a official of a registered Trade Union or Employee
himself may apply to the Authority for claims for getting a
direction.
 The Appropriate Authority will hear the applicant and the
Employer and after giving both the persons a reasonable
opportunity to hear and after making such further inquiry will pass
an order.
 In case the Appropriate Authority finds that the Employer is guilty
then, the Appropriate Authority will direct the Employer for
Payment of Compensation which may not exceed 10 times of the
actual Compensation.
 In case the Appropriate Authority finds that the Employee is guilty
then, no Compensation is payable.
 In case the Appropriate Authority finds that both Employer and
Employee is not guilty then, Employee has to pay Rs.50/- to
Employer.
 The direction given by the Appropriate Authority shall be final.
 The Compensation directed by the Appropriate Authority shall be
recovered from the Employer as if the Authority is a Magistrate.
The proceedings before the Authority will be treated on par with Civil
Courts.
 OFFENCE
Any employer who had violated the provisions of the Act will be
treated as he had made an offence and Rs.500 fine will be collected
from the employer.

 The Appropriate Authority will pass orders for any claims made by
Employee against Employer.

 No Court shall take any case directly.

 No Court shall take up a Case of Appeal against the order of the

Appropriate Authority not more than 30 days from the date of order.

 In the case of a Company, the person incharge at the time of offence

happened will be responsible to discharge the liability under this Act.

 In the case of a Partnership Firm, the Managing Partner at the time

of Offence happened will be responsible to discharge the liability
under this Act.
 EXEMPTIONS AND EXCEPTIONS
 The Appropriate Government depending on the situation
may direct that this Act shall not be applicable in relation
to Wages payable to disabled Employees.
 The Appropriate Government for any special reasons by
notification in the official gazette direct that the Act shall
not be applicable to any specific locality or specified
group of Employees.
 The Act will not be applicable to the Wages payable by an
Employer to a member of his family who is living with
him and dependent on him. Family includes his / her
spouse, child, parent, brother or sister.
 POWER TO MAKE RULES
 The Central Government may give directions to the State
Government for the execution of this Act.
 The Central Government is empowered to make rules from time
to time through notification in the official gazette.
 The Central Government is empowered to make rules
prescribing the terms of office of the members, the procedure to
be followed in conduct of business, the method of voting, the
manner of filling of casual vacancies in membership and the
quorum necessary for the transaction of business of the Central
Advisory Board.
 The Appropriate Government is having the powers of the
Central Government to make rules for the purposes as
mentioned above.
The End